A sheep steals baby Jesus from Mary in the midst of the Nativity Scene.
USA TODAY

One of the concrete sheep in the Algona Nativity scene on display, Tuesday, Dec. 20, 2016, at the Kossuth County Fairgrounds in Algona. The scene was created by German POWs held in Algona in the 1940s. The half life-size figures are made of concrete and plaster, some with wire or wood frames. (Photo11: Kelsey Kremer/The Register)

ELKHART, Ind. — A federal appeals court panel has concluded that a revised version of an Indiana public high school's annual holiday show that included a mannequin Nativity scene doesn't violate the U.S. Constitution.

Concord High School came under scrutiny after the Freedom From Religion Foundation filed a lawsuit alleging the 2015 Concord Christmas Spectacular violated the First Amendment's prohibition on government establishment of religion, The Goshen News reported.

The judges from the U.S. Court of Appeals for the Seventh Circuit in Chicago issued their review of the show on Wednesday.

The district court agreed with the plaintiffs that the 2014 show and the version initially proposed for 2015 violated the First Amendment's Establishment Clause and awarded nominal damages. The judges said the nativity scene was problematic in 2014 and in the proposed show.

But the three-judge panel also said that the show as it is now wouldn't lead reasonable observers to feel the school is "signing off on a particular religious message" because the Nativity scene "has become just another visual complement for a single song." They said the show may go on in its current state.

Freedom From Religion Foundation officials called the ruling a "partial win."

"Although FFRF is disappointed that the court was persuaded by the school's superficial changes to its longstanding Christian performance, the court also affirmed that the plaintiffs are entitled to damages and a declaratory judgment that prior versions of the show violated the Establishment Clause, calling the live nativity in particular 'problematic,'" officials said.

Concord Community Schools Superintendent John Trout thanked the court for "thoughtful analysis in reaching its decision."